National Strategic Reference Framework

MALTA – National Strategic Reference Framework 2007-2013 Draft Document for Consultation
Chapter 4. Benchmarking Malta with the EU25
4.1 Introduction
Malta’s national strategic reference framework aims to assess Malta’s needs and
challenges for Malta’s progress within the framework of convergence to European Union
benchmarks. Table 4.1 below highlights some structural indicators for Malta and the
European Union 25 Member States on economic performance, employment and human
capital development, innovation and research and environment in a bid to elucidate on
Malta’s comparative position vis-à-vis EU benchmarks.
4.2 Economic Performance
In terms of economic performance, Malta’s real economic growth rate has been lagging
behind the EU-25 average during the period 2001-2004 (in 2004, a negative rate of 1.5
per cent compared to 2.4 per cent). Declining economic performance is reflected in GDP
per capita decreasing from 74.0 in 2001 to 69.2 in 2004. Whereas, Malta’s labour
productivity has been registering a deterioration over recent years, total employment
growth has recorded a turnaround in 2004. In 2004 Malta’s employment growth was
higher than the EU25 average. The indicators for trade integration of goods and services
extensively reflect the high degree of openness of Malta’s economy. In 2004, Malta’s
trade integration of goods stood at 57.8 per cent compared to the EU25 average of 9.4 per
cent. In the same year, Malta’s trade integration of services reached 21.7 per cent
compared to the 3.3 per cent for the EU25. Malta exhibits a strong foreign direct
investment intensity indicator compared to the EU25 average. On the basis of this
comparative performance, Malta acknowledges the need to boost its economic growth
fundamentals, improve productivity and foster international competitiveness in the goods
and services market.
4.3 Employment
In terms of employment, the disparity between the male and female activity rates in
comparison to the EU trends is quite evident. However, the consistently lower trend for
female employment rates should be seen in terms of the wide socio-cultural factors rather
than merely from a restricted economic analysis viewpoint. Malta’s employment rate of
older workers and adult participation in education and training are both lower than the
average for EU25. Malta’s unemployment rate has consistently been lower than the EU25
average, partly highlighting the resilience of the economy in maintaining employment
levels despite sluggish economic growth trends. The low female labour market
participation rate partly results from a mixture of socio-economic factors which seem to